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Technology Stocks : Atmel - the trend is about to change -- Ignore unavailable to you. Want to Upgrade?

To: czycz who wrote (13462)	7/30/2004 3:54:20 PM
From: tech101	Read Replies (1) \| Respond to of 13565

Researcher repeats 2005 chip market 28% growth forecast Future Horizons sticks to growth predictions; warns Europe is lagging rest of world Silicon Strategies 07/30/2004, 6:00 AM ET LONDON -- The global semiconductor market will grow 32 percent in 2004 to $220 billion, and a further 28.0 percent in 2005 to $282 billion according to the 2004 mid-term semiconductor forecast, from semiconductor analyst Future Horizons (Sevenoaks, England). In so saying Future Horizons is sticking to a prediction made in January 2004. Since then many other forecasters have downgraded their forecasts for 2004 and 2005 and some have suggested that downturn could hit in 2005 producing a contraction of the semiconductor market. But Future Horizons argued that the semiconductor market would not see a downturn until 2006 when the market would fall by 8 percent to $259 billion after an 18-month growth cycle. "The second half of 2004 will continue strong despite the fact the industry still doesn't believe it and feels bruised and battered from the 2001 downturn. Capacity is tight, and we see it staying that way for a few more quarters, despite the current acceleration in capital spending and an anticipated slowing in unit demand. We don't see the supply/demand cross-over occurring until the back end of 2005, causing capacity to overshoot, signaling a downturn in 2006," said Malcolm Penn, chief executive officer of Future Horizons, in a statement. "We fully accept that the 28 percent growth forecast for 2005 is high -- and out of line with current conventional wisdom -- but if the 2005 world economy grows at the currently predicted 4.0 percent to 4.6 percent level, unit demand will hold up and capacity will struggle. Despite management being cautious as a result of the severity of the previous downturn and to some extent the new levels of corporate responsibility post-Enron, this is my ninth semiconductor cycle and don't see any signs of it being any different from the others," said Penn. However, Penn's optimism does not extend to all geographical regions. The European market is out of step with the worldwide semiconductor recovery. Future Horizons reported a $40 billion trade deficit in electronics equipment for the European Union in 2003 with worldwide market share falling. As a result, its share of the worldwide semiconductor market dropped from a peak of 24 percent in 1998 to 19 percent in 2003. Future Horizons predicts that the European market will lag worldwide semiconductor market growth, with 26.6 percent in 2004 to $40.9 billion, 26.0 percent to $51.5 billion in 2005 and -6.0 percent to $48.4 billion in 2006. "We see nothing on the horizons to reverse Europe's decline," Penn said. siliconstrategies.com